If you wanted to bet the over/under on rounds, you are betting the fight will be or won't be stopped before a certain point. If you bet it would go 10.5rounds, the fight would have to complete a full 10 rounds, plus one minute 30 seconds of the 11th round.

This is the correct definition, btw. 10.5 rounds = ten and a half rounds (in other words, halfway through round eleven).